Vocabulary

• Read and translate new words and expressions using a dictionary.

expensive, law, obliged, token money, individual, century, illegal, bank deposit, coins, payment, quantities

• In pairs make dialogues using expressions from the list above. Read the dialogues aloud.

Pre-Reading task

Scan the text and put in the missing words and expressions from the list above.

Reading

Read and translate the text.

Different Kinds Of Money

In prisoner-of-war camps, cigarettes served as money. In the 19th …….. money was mainly gold and silver coins. These are examples of commodity money, ordinary goods with industrial uses (gold) and consumption uses (cigarettes), which also serve as a medium of exchange. To use a commodity money, society must either cut back on other uses of that commodity or devote scarce resources to producing additional ……… of the commodity. But there are less ……….. ways for society to produce money.

A token money is a means of payment whose value or purchasing power as money greatly exceeds its cost of production or value in uses other than as money.

A $10 note is worth far more as money than as a 3 x 6 inch piece of high-quality paper. Similarly, the monetary value of most ……… exceeds the amount you would get by melting them down and selling off the metals they contain. By collectively agreeing to use token money, society economizes on the scarce resources required to produce money as a medium of exchange. Since the manufacturing costs are tiny, why doesn't everyone make $10 notes?

The essential condition for the survival of ……… ………. is the restriction of the right to supply it. Private production is………….:

Society enforces the use of token money by making it legal tender. The …….. says it must be accepted as a means of…………..

In modern economies, token money is supplemented by IOU money.

An IOU money is a medium of exchange based on the debt of a private firm or ……………..

A bank deposit is IOU money because it is a debt of the bank. When you have a ……….. ………… the bank owes you money. You can write a cheque to yourself or a third party and the bank is ………… to pay whenever the cheque is presented. Bank deposits are a medium of exchange because they are generally accepted as payment.

Work with the text

• Find five main terms in the text.

• Try to give their definitions in English.

• Read the definitions to your peers. They should guess the term.

Translate from Russian into English:

• В тюрьмах и военных лагерях сигареты выполняли функцию денег.

• Денежные знаки является средствами оплаты в том случае, когда величина или покупательная способность существенно превышает издержку производства.

• Существует всеобщее соглашение об использовании денежных знаков, посредством чего общество экономит ресурсы необходимые для производства денег, как единицы обмена.

• Если расходы на производство являются настолько незначительными, почему бы всем не начать производство десятидолларовых купюр?

• Общество осуществляет использование денежных знаков на юридической основе.

UNIT 3

Lead in

• Do you use bank service?

• Do you think banks are essential nowadays?

• How is your job connected with bank service?

Discussion

• Divide in two groups?

• In groups discuss what is better: to save money at home or to take mortgage in bank?

• Discuss your ideas.